Agreement reached on health program

Legislation would add $35B to extend insurance to low-income children

Washington  Lawmakers in a key Senate committee brokered a bipartisan agreement Friday that they said would extend health insurance to an additional 3.3 million low-income children in the U.S.

The legislation would add $35 billion over the next five years to a program that subsidizes health coverage for families with incomes too high to qualify for Medicaid but too low to afford insurance on their own. The increased funding would be paid for through a 61-cent increase in the federal excise tax on a pack of cigarettes.

Many of the details of the package were not available, but the lawmakers issued a joint news release Friday night announcing their agreement.

"The State Children's Health Insurance Program has helped millions upon millions of low-income, uninsured American kids see doctors when they're sick, and this agreement will make sure that even more children get the health care they need," said Max Baucus, D-Mont., chairman of the Senate Finance Committee, which will take up the measure next week.

Democrats originally proposed adding $50 billion over five years, which would bring total spending to $75 billion. The Bush administration proposed adding $5 billion to the program over the next five years - on top of the $25 billion available under current spending levels.

Republicans whittled away at some of the proposed spending. They said the agreement reached late Friday would also refocus the program on low-income children. They were critical of Bush administration waivers that allowed hundreds of thousands of adults to participate.

"This proposal may not be perfect, but it's a true compromise that maintains the integrity of the CHIP program and ensures that it will continue to help the millions of children who desperately need it," said Sen. Orrin Hatch, R-Utah.

More than 6 million people, including about 600,000 adults, get health insurance coverage each year through SCHIP. The federal government pays for about 70 percent of the program's costs, while states pay the rest.

Rep. Diana DeGette, D-Colo., said House Democrats will push for more funding than what the Senate Finance Committee leaders proposed.

"I've been talking to a lot of my colleagues," said DeGette, a member of the House Energy and Commerce Committee "They want to find a way to get $50 billion."

She said the extra money would make it easier to increase enrollment among the millions of children eligible for Medicaid or SCHIP but currently not enrolled.

She said that House Democrats would also look to higher tobacco taxes to pay for the funding increase, but they do not plan to rely solely on a tobacco tax. The bill would also reduce payments to some private insurance plans that provide health coverage through a program called Medicare Advantage, she said.